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Can Still E File 2011 Taxes

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Can Still E File 2011 Taxes

Can still e file 2011 taxes Publication 908 - Main Content Table of Contents Bankruptcy Code Tax Compliance RequirementsTax Returns Due for Periods Ending Before the Bankruptcy Filing in Chapter 13 Cases Tax Returns Due After the Bankruptcy Filing Individuals in Chapter 12 or 13 Individuals in Chapter 7 or 11Debtor's Election To End Tax Year – Form 1040 Taxes and the Bankruptcy Estate Bankruptcy Estate – Income, Deductions, and Credits Tax Reporting – Chapter 11 Cases Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due Tax Return Example – Form 1041 Partnerships and CorporationsFiling Requirements Partnerships Corporations Receiverships Determination of TaxPrompt Determination Requests Court Jurisdiction Over Tax MattersBankruptcy Court Tax Court Federal Tax ClaimsUnsecured Tax Claims Discharge of Unpaid Tax Debt CancellationExclusions Reduction of Tax Attributes Partnerships Corporations Tax Attribute Reduction Example How To Get Tax HelpTaxpayer Advocacy Panel (TAP). Can still e file 2011 taxes Low Income Taxpayer Clinics (LITCs). Can still e file 2011 taxes Bankruptcy Code Tax Compliance Requirements Tax Returns Due for Periods Ending Before the Bankruptcy Filing in Chapter 13 Cases The Bankruptcy Code requires chapter 13 debtors to file all required tax returns for tax periods ending within 4 years of the debtor's bankruptcy filing. Can still e file 2011 taxes All such federal tax returns must be filed with the IRS before the date first set for the first meeting of creditors. Can still e file 2011 taxes The debtor may request the trustee to hold the meeting open for an additional 120 days to enable the debtor to file the returns (or until the day the returns are due under an automatic IRS extension, if later). Can still e file 2011 taxes After notice and hearing, the bankruptcy court may extend the period for another 30 days. Can still e file 2011 taxes Failure to timely file the returns can prevent confirmation of a chapter 13 plan and result in either dismissal of the chapter 13 case or conversion to a chapter 7 case. Can still e file 2011 taxes Note. Can still e file 2011 taxes Individual debtors should use their home address when filing Form 1040 with the IRS. Can still e file 2011 taxes Returns should not be filed “in care of” the trustee's address. Can still e file 2011 taxes Ordering tax transcripts and copies of returns. Can still e file 2011 taxes   Trustees may require the debtor to submit copies or transcripts of the debtor's returns as proof of filing. Can still e file 2011 taxes The debtor can request free transcripts of the debtor's income tax returns by filing Form 4506-T, Request for Transcript of Tax Return, with the IRS or by placing a request on the IRS's free Automated Delivery Service (ADS), available by calling 1-800-829-1040. Can still e file 2011 taxes If requested through ADS, the transcript will be mailed to the debtor's most current address according to the IRS's records. Can still e file 2011 taxes Transcripts requested using Form 4506-T may be mailed to any address, including to the attention of the trustee in the debtor's bankruptcy case. Can still e file 2011 taxes Transcripts are normally mailed within 10 to 15 days of receipt of the request by the IRS. Can still e file 2011 taxes A transcript contains most of the information on the debtor's filed return, but it is not a copy of the return. Can still e file 2011 taxes To request a copy of the debtor's filed return, file Form 4506, Request for Copy of Tax Return. Can still e file 2011 taxes It may take up to 60 days for the IRS to provide the copies after receipt of the debtor's request, and there is a fee of $57. Can still e file 2011 taxes 00 per tax return for copies of the returns. Can still e file 2011 taxes Tax Returns Due After the Bankruptcy Filing For debtors filing bankruptcy under all chapters (chapters 7, 11, 12, or 13), the Bankruptcy Code provides that if the debtor does not file a tax return that becomes due after the commencement of the bankruptcy case, or obtain an extension for filing the return before the due date, the taxing authority may request that the bankruptcy court either dismiss the case or convert the case to a case under another chapter of the Bankruptcy Code. Can still e file 2011 taxes If the debtor does not file the required return or obtain an extension within 90 days after the request is made, the bankruptcy court must dismiss or convert the case. Can still e file 2011 taxes Tax returns and payment of taxes in chapter 11 cases. Can still e file 2011 taxes   The Bankruptcy Code provides that a chapter 11 debtor's failure to timely file tax returns and pay taxes owed after the date of the “order for relief” (the bankruptcy petition date in voluntary cases) is cause for dismissal of the chapter 11 case, conversion to a chapter 7 case, or appointment of a chapter 11 trustee. Can still e file 2011 taxes Disclosure of debtor's return information to trustee. Can still e file 2011 taxes   In bankruptcy cases filed under chapter 7 or 11 by individuals, the debtor's income tax returns for the year the bankruptcy case begins and for earlier years are, upon written request, open to inspection by or disclosure to the trustee. Can still e file 2011 taxes If the bankruptcy case was not voluntary, disclosure cannot be made before the bankruptcy court has entered an order for relief, unless the court rules that the disclosure is needed for determining whether relief should be ordered. Can still e file 2011 taxes    In bankruptcy cases other than those of individuals filing under chapter 7 or 11, the debtor's income tax returns for the current and prior years are, upon written request, open to inspection by or disclosure to the trustee, but only if the IRS finds that the trustee has a material interest that will be affected by information on the return. Can still e file 2011 taxes Material interest is generally defined as a financial or monetary interest. Can still e file 2011 taxes Material interest is not limited to the trustee's responsibility to file a return on behalf of the bankruptcy estate. Can still e file 2011 taxes   However, the U. Can still e file 2011 taxes S. Can still e file 2011 taxes Trustee (an officer of the Department of Justice, responsible for maintaining and supervising a panel of private trustees for chapter 7 bankruptcy cases) and the standing chapter 13 trustee (the administrator of chapter 13 cases in a specific geographic region) generally do not have a material interest in the debtor’s return or return information. Can still e file 2011 taxes Disclosure of bankruptcy estate's return information to debtor. Can still e file 2011 taxes    The bankruptcy estate's tax return(s) are open, upon written request, to inspection by or disclosure to the individual debtor in a chapter 7 or 11 bankruptcy. Can still e file 2011 taxes Disclosure of the estate's return to the debtor may be necessary to enable the debtor to determine the amount and nature of the tax attributes, if any, that the debtor assumes when the bankruptcy estate terminates. Can still e file 2011 taxes Individuals in Chapter 12 or 13 Only individuals may file a chapter 13 bankruptcy. Can still e file 2011 taxes Chapter 13 relief is not available to corporations or partnerships. Can still e file 2011 taxes The bankruptcy estate is not treated as a separate entity for tax purposes when an individual files a petition under chapter 12 (Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income) or 13 (Adjustment of Debts of an Individual with Regular Income) of the Bankruptcy Code. Can still e file 2011 taxes In these cases the individual continues to file the same federal income tax returns that were filed prior to the bankruptcy petition, Form 1040, U. Can still e file 2011 taxes S. Can still e file 2011 taxes Individual Income Tax Return. Can still e file 2011 taxes On the debtor's individual tax return, Form 1040, report all income received during the entire year and deduct all allowable expenses. Can still e file 2011 taxes Do not include in income the amount from any debt canceled due to the debtor's bankruptcy. Can still e file 2011 taxes To the extent the debtor has any losses, credits, or basis in property that were previously reduced as a result of canceled debt, these reductions must be included on the debtor's return. Can still e file 2011 taxes See Debt Cancellation, later. Can still e file 2011 taxes Interest on trust accounts in chapter 13 cases. Can still e file 2011 taxes   In chapter 13 proceedings, do not include interest earned on amounts held by the trustee in trust accounts as income on the debtor's return. Can still e file 2011 taxes This interest is not available to either the debtor or creditors, it is available only to the trustee for use by the U. Can still e file 2011 taxes S. Can still e file 2011 taxes Trustee system. Can still e file 2011 taxes The interest is also not taxable to the trustee as income. Can still e file 2011 taxes Individuals in Chapter 7 or 11 When an individual debtor files for bankruptcy under chapter 7 or 11 of the Bankruptcy Code, the bankruptcy estate is treated as a new taxable entity, separate from the individual taxpayer. Can still e file 2011 taxes The bankruptcy estate in a chapter 7 case is represented by a trustee. Can still e file 2011 taxes The trustee is appointed to administer the estate and liquidate any nonexempt assets. Can still e file 2011 taxes In chapter 11 cases, the debtor often remains in control of the assets as a “debtor-in-possession” and acts as the bankruptcy trustee. Can still e file 2011 taxes However, the bankruptcy court, for cause, may appoint a trustee if such appointment is in the best interests of the creditors and the estate. Can still e file 2011 taxes During the chapter 7 or 11 bankruptcy, the debtor continues to file an individual tax return on Form 1040. Can still e file 2011 taxes The bankruptcy trustee files a Form 1041 for the bankruptcy estate. Can still e file 2011 taxes However, when a debtor in a chapter 11 bankruptcy case remains a debtor-in-possession, he or she must file both a Form 1040 individual return and a Form 1041 estate return for the bankruptcy estate (if return filing requirements are met). Can still e file 2011 taxes Although a husband and wife may file a joint bankruptcy petition whose bankruptcy estates are jointly administered, the estates are be treated as two separate entities for tax purposes. Can still e file 2011 taxes Two separate bankruptcy estate income tax returns must be filed (if each spouse separately meets the filing requirements). Can still e file 2011 taxes For information about determining the tax due and paying tax for a chapter 7 or 11 bankruptcy estate, see Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due, later. Can still e file 2011 taxes Debtor's Election To End Tax Year – Form 1040 Short tax years. Can still e file 2011 taxes   An individual debtor in a chapter 7 or 11 case may elect to close the debtor's tax year for the year in which the bankruptcy petition is filed, as of the day before the date on which the bankruptcy case commences. Can still e file 2011 taxes If the debtor makes this election, the debtor's tax year is divided into 2 short tax years of less than 12 months each. Can still e file 2011 taxes The first tax year ends on the day before the commencement date and the second tax year begins on the commencement date. Can still e file 2011 taxes   If the election is made, the debtor's federal income tax liability for the first short tax year becomes an allowable claim against the bankruptcy estate arising before the bankruptcy filing. Can still e file 2011 taxes Also, the tax liability for the first short tax year is not subject to discharge under the Bankruptcy Code. Can still e file 2011 taxes    If the debtor does not make an election to end the tax year, the commencement of the bankruptcy case does not affect the debtor's tax year. Can still e file 2011 taxes Also, no part of the debtor's income tax liability for the year in which the bankruptcy case commences can be collected from the bankruptcy estate. Can still e file 2011 taxes Note. Can still e file 2011 taxes The debtor cannot make a short tax year election if no assets, other than exempt property, are in the bankruptcy estate. Can still e file 2011 taxes Making the Election - Filing Requirements First short tax year. Can still e file 2011 taxes   The debtor can elect to end the debtor's tax year by filing a return on Form 1040 for the first short tax year. Can still e file 2011 taxes The return must be filed on or before the 15th day of the fourth full month after the end of that first tax year. Can still e file 2011 taxes Second short tax year. Can still e file 2011 taxes   If the debtor elects to end the tax year on the day before filing the bankruptcy case, the debtor must file the return for the first short tax year in the manner discussed above. Can still e file 2011 taxes   If the debtor makes this election, the debtor must also file a separate Form 1040 for the second short tax year by the regular due date. Can still e file 2011 taxes To avoid delays in processing the return, write “Second Short Year Return After Section 1398 Election” at the top of the return. Can still e file 2011 taxes Example. Can still e file 2011 taxes Jane Doe, an individual calendar year taxpayer, filed a bankruptcy petition under chapter 7 or 11 on May 8, 2012. Can still e file 2011 taxes If Jane elected to close her tax year at the commencement of her case, Jane's first short year for 2012 runs from January 1 through May 7, 2012. Can still e file 2011 taxes Jane's second short year runs from May 8, 2012, through December 31, 2012. Can still e file 2011 taxes To have a timely filed election for the first short year, Jane must file Form 1040 (or an extension of time to file) for the period January 1 through May 7 by September 15. Can still e file 2011 taxes To avoid delays in processing the return, write “Section 1398 Election” at the top of the return. Can still e file 2011 taxes The debtor may also make the election by attaching a statement to Form 4868, Automatic Extension of Time to File an U. Can still e file 2011 taxes S. Can still e file 2011 taxes Individual Tax Return. Can still e file 2011 taxes The statement must state that the debtor elects under IRC section 1398(d)(2) to close the debtor's tax year on the day before filing the bankruptcy case. Can still e file 2011 taxes The debtor must file Form 4868 by the due date of the return for the first short tax year. Can still e file 2011 taxes The debtor's spouse may also elect to close his or her tax year, see Election by debtor's spouse, below. Can still e file 2011 taxes Election by debtor's spouse. Can still e file 2011 taxes   If the debtor is married, the debtor's spouse may join in the election to end the tax year. Can still e file 2011 taxes If the debtor and spouse make a joint election, the debtor must file a joint return for the first short tax year. Can still e file 2011 taxes The debtor must elect by the due date for filing the return for the first short tax year. Can still e file 2011 taxes Once the election is made, it cannot be revoked for the first short tax year. Can still e file 2011 taxes However, the election does not prevent the debtor and the spouse from filing separate returns for the second short tax year. Can still e file 2011 taxes Later bankruptcy of spouse. Can still e file 2011 taxes    If the debtor's spouse files for bankruptcy later in the same year, he or she may also choose to end his or her tax year, regardless of whether he or she joined in the election to end the debtor's tax year. Can still e file 2011 taxes   As each spouse has a separate bankruptcy, one or both of them may have 3 short tax years in the same calendar year. Can still e file 2011 taxes If the debtor's spouse joined the debtor's election or if the debtor had not made the election to end the tax year, the debtor can join in the spouse's election. Can still e file 2011 taxes However, if the debtor made an election and the spouse did not join that election, the debtor cannot then join the spouse's later election. Can still e file 2011 taxes The debtor and the spouse are precluded from this election because they have different tax years. Can still e file 2011 taxes This results because the debtor does not have a tax year ending the day before the spouse's filing for bankruptcy, and the debtor cannot file a joint return for a year ending on the day before the spouse's filing of bankruptcy. Can still e file 2011 taxes Example 1. Can still e file 2011 taxes Paul and Mary Harris are calendar-year taxpayers. Can still e file 2011 taxes Paul's voluntary chapter 7 bankruptcy case begins on March 4. Can still e file 2011 taxes If Paul does not make an election, his tax year does not end on March 3. Can still e file 2011 taxes If he makes an election, Paul's first tax year is January 1–March 3, and his second tax year begins on March 4. Can still e file 2011 taxes Mary could join in Paul's election as long as they file a joint return for the tax year January 1–March 3. Can still e file 2011 taxes They must make the election by July 15, the due date for filing the joint return. Can still e file 2011 taxes Example 2. Can still e file 2011 taxes Fred and Ethel Barnes are calendar-year taxpayers. Can still e file 2011 taxes Fred's voluntary chapter 7 bankruptcy case begins on May 6, and Ethel's bankruptcy case begins on November 1 of the same year. Can still e file 2011 taxes Ethel could elect to end her tax year on October 31. Can still e file 2011 taxes If Fred did not elect to end his tax year on May 5, or if he elected to do so but Ethel had not joined in his election, Ethel would have 2 tax years in the same calendar year if she decided to close her tax year. Can still e file 2011 taxes Her first tax year is January 1–October 31, and her second year is November 1–December 31. Can still e file 2011 taxes If Fred did not end his tax year as of May 5, he could join in Ethel's election to close her tax year on October 31, but only if they file a joint return for the tax year January 1–October 31. Can still e file 2011 taxes If Fred elected to end his tax year on May 5, but Ethel did not join in Fred's election, Fred cannot join in Ethel's election to end her tax year on October 31. Can still e file 2011 taxes Fred and Ethel cannot file a joint return for that short tax year because their tax years preceding October 31 were not the same. Can still e file 2011 taxes Example 3. Can still e file 2011 taxes Jack and Karen Thomas are calendar-year taxpayers. Can still e file 2011 taxes Karen's voluntary chapter 7 bankruptcy case began on April 10, and Jack's voluntary chapter 7 bankruptcy case began on October 3 of the same year. Can still e file 2011 taxes Karen elected to close her tax year on April 9 and Jack joins in Karen's election. Can still e file 2011 taxes Under these facts, Jack would have 3 tax years for the same calendar year if he makes the election relating to his own bankruptcy case. Can still e file 2011 taxes The first tax year would be January 1–April 9; the second, April 10–October 2; and the third, October 3–December 31. Can still e file 2011 taxes Karen may join in Jack's election if they file a joint return for the second short tax year (April 10–October 2). Can still e file 2011 taxes If Karen does join in, she would have the same 3 short tax years as Jack. Can still e file 2011 taxes Also, if Karen joins in Jack's election, they may file a joint return for the third tax year (October 3–December 31), but they are not required to do so. Can still e file 2011 taxes Annualizing taxable income. Can still e file 2011 taxes   If the debtor elects to close the tax year, the debtor must annualize taxable income for each short tax year in the same manner a change in annual accounting period is calculated. Can still e file 2011 taxes See Short Tax Year in Publication 538, for information on how to annualize the debtor's income and to figure the tax for the short tax year. Can still e file 2011 taxes Dismissal of bankruptcy case. Can still e file 2011 taxes   If the bankruptcy court later dismisses an individual chapter 7 or 11 case, the bankruptcy estate is no longer treated as a separate taxable entity. Can still e file 2011 taxes It is as if no bankruptcy estate was created for tax purposes. Can still e file 2011 taxes In this situation, the debtor must file amended tax returns on Form 1040X, to replace all full or short year individual returns (Form 1040) and bankruptcy estate returns (Form 1041) filed as a result of the bankruptcy case. Can still e file 2011 taxes Income, deductions, and credits previously reported by the bankruptcy estate must be reported on the debtor's amended returns. Can still e file 2011 taxes Attach a statement to the amended returns explaining why the debtor is filing an amended return. Can still e file 2011 taxes Taxes and the Bankruptcy Estate Property of the bankruptcy estate. Can still e file 2011 taxes   At the commencement of a bankruptcy case a bankruptcy estate is created. Can still e file 2011 taxes Bankruptcy law determines which of the debtor's assets become part of a bankruptcy estate. Can still e file 2011 taxes This estate generally includes all of the debtor's legal and equitable interests in property as of the commencement date. Can still e file 2011 taxes However, there are exceptions and certain property is exempted or excluded from the bankruptcy estate. Can still e file 2011 taxes Note. Can still e file 2011 taxes Exempt property and abandoned property are initially part of the bankruptcy estate, but are subsequently removed from the estate. Can still e file 2011 taxes Excluded property is never included in the estate. Can still e file 2011 taxes Transfer of assets between debtor and bankruptcy estate. Can still e file 2011 taxes   The transfer (other than by sale or exchange) of an asset from the debtor to the bankruptcy estate is not treated as a disposition for income tax purposes. Can still e file 2011 taxes The transfer does not result in gain or loss, acceleration of income or deductions, or recapture of deductions or credits. Can still e file 2011 taxes For example, the transfer of an installment obligation to the estate would not accelerate gain under the rules for reporting installment sales. Can still e file 2011 taxes The estate assumes the same basis, holding period, and character of the transferred assets. Can still e file 2011 taxes Also, the estate generally accounts for the transferred assets in the same manner as debtor. Can still e file 2011 taxes   When the bankruptcy estate is terminated or dissolved, any resulting transfer (other than by sale or exchange) of the estate's assets back to the debtor is also not treated as a disposition for tax purposes. Can still e file 2011 taxes The transfer does not result in gain or loss, acceleration of income or deductions, or recapture of deductions or credits to the estate. Can still e file 2011 taxes Abandoned property. Can still e file 2011 taxes    The abandonment of property by the estate to the debtor is a nontaxable disposition of property. Can still e file 2011 taxes If the debtor received abandoned property from the bankruptcy estate, the debtor assumes the same basis in the property that the bankruptcy estate had. Can still e file 2011 taxes Separate taxable entity. Can still e file 2011 taxes   When an individual files a bankruptcy petition under chapter 7 or 11, the bankruptcy estate is treated as a separate taxable entity from the debtor. Can still e file 2011 taxes The court appointed trustee or the debtor-in-possession is responsible for preparing and filing all of the bankruptcy estate's tax returns, including its income tax return on Form 1041, U. Can still e file 2011 taxes S. Can still e file 2011 taxes Income Tax Return for Estates and Trusts, and paying its taxes. Can still e file 2011 taxes The debtor remains responsible for filing his or her own returns on Form 1040, U. Can still e file 2011 taxes S. Can still e file 2011 taxes Individual Income Tax Return, and paying taxes on income that does not belong to the estate. Can still e file 2011 taxes Employer identification number. Can still e file 2011 taxes   The trustee or debtor-in-possession must obtain an EIN for a bankruptcy estate. Can still e file 2011 taxes The trustee or debtor-in-possession uses this EIN on all tax returns filed for the bankruptcy estate with the IRS, including estimated tax returns. Can still e file 2011 taxes See Employer identification number, under Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due, later. Can still e file 2011 taxes    The social security number of the individual debtor cannot be used as the EIN for the bankruptcy estate. Can still e file 2011 taxes Income, deductions, and credits – Form 1040. Can still e file 2011 taxes   In an individual chapter 7 or 11 bankruptcy case, do not include the income, deductions, and credits that belong to the bankruptcy estate on the debtor's individual income tax return (Form 1040). Can still e file 2011 taxes Also, do not include as income on the debtor's return the amount of any debt canceled by reason of the bankruptcy discharge. Can still e file 2011 taxes The bankruptcy estate must reduce certain losses, credits, and the basis in property (to the extent of these items) by the amount of canceled debt. Can still e file 2011 taxes See Debt Cancellation, below. Can still e file 2011 taxes Note. Can still e file 2011 taxes The debtor may not be able to claim certain deductions available to the bankruptcy estate such as administrative expenses. Can still e file 2011 taxes Additionally, the bankruptcy exclusion cannot be used to exclude income from a cancelled debt if the discharge of indebtedness was not within the bankruptcy case, even though the debtor was under the bankruptcy court's protection at the time. Can still e file 2011 taxes However, other exclusions, such as the insolvency exclusion, may apply. Can still e file 2011 taxes Bankruptcy Estate – Income, Deductions, and Credits Bankruptcy Estate Income Income of the estate in individual chapter 7 cases. Can still e file 2011 taxes    The gross income of the bankruptcy estate includes gross income of the debtor to which the estate is entitled under the Bankruptcy Code. Can still e file 2011 taxes Gross income also includes income generated by the bankruptcy estate from property of the estate after the commencement of the case. Can still e file 2011 taxes   Gross income of the bankruptcy estate does not include amounts received or accrued by the debtor before the commencement of the case. Can still e file 2011 taxes Additionally, in chapter 7 cases, gross income of the bankruptcy estate does not include any income that the debtor earns after the date of the bankruptcy petition. Can still e file 2011 taxes Income of the estate in individual chapter 11 cases. Can still e file 2011 taxes    In chapter 11 cases, under IRC section 1398(e)(1), gross income of the bankruptcy estate includes income that the debtor earns for services performed after the bankruptcy petition date. Can still e file 2011 taxes Also, earnings from services performed by an individual debtor after the commencement of the chapter 11 case are property of the bankruptcy estate under section 1115 of the Bankruptcy Code (11 U. Can still e file 2011 taxes S. Can still e file 2011 taxes C. Can still e file 2011 taxes section 1115). Can still e file 2011 taxes Note. Can still e file 2011 taxes A debtor-in-possession may be compensated by the estate for managing or operating a trade or business that the debtor conducted before the commencement of the bankruptcy case. Can still e file 2011 taxes Such payments should be reported by the debtor as miscellaneous income on his or her individual income tax return (Form 1040). Can still e file 2011 taxes Amounts paid by the estate to the debtor-in-possession for managing or operating the trade or business may qualify as administrative expenses of the estate. Can still e file 2011 taxes See Administrative expenses, below. Can still e file 2011 taxes Conversion or dismissal of chapter 11 cases. Can still e file 2011 taxes   If a chapter 11 case is converted to a chapter 13 case, the chapter 13 estate is not a separate taxable entity and earnings from post-conversion services and income from property of the estate realized after the conversion to chapter 13 are taxed to the debtor. Can still e file 2011 taxes If the chapter 11 case is converted to a chapter 7 case, 11 U. Can still e file 2011 taxes S. Can still e file 2011 taxes C. Can still e file 2011 taxes section 1115 does not apply after conversion and: Earnings from post-conversion services will be taxed to the debtor, rather than the estate, and The property of the chapter 11 estate will become property of the chapter 7 estate. Can still e file 2011 taxes Any income on this property will be taxed to the estate even if the income is realized after the conversion to chapter 7. Can still e file 2011 taxes If a chapter 11 case is dismissed, the debtor is treated as if the bankruptcy case had never been filed and as if no bankruptcy estate had been created. Can still e file 2011 taxes Bankruptcy Estate Deductions and Credits A bankruptcy estate deducts expenses incurred in a trade, business, or activity, and uses credits in the same way the debtor would have deducted or credited them had he or she continued operations. Can still e file 2011 taxes Note. Can still e file 2011 taxes Expenses may be disallowed under other provisions of the IRC (such as the disallowance of certain capital expenditures or expenses relating to tax-exempt interest). Can still e file 2011 taxes Administrative expenses. Can still e file 2011 taxes   Allowable expenses include administrative expenses. Can still e file 2011 taxes    Administrative expenses can only be deducted by the estate, never by the debtor. Can still e file 2011 taxes   The bankruptcy estate is allowed deductions for bankruptcy administrative expenses and fees, including accounting fees, attorney fees, and court costs. Can still e file 2011 taxes These expenses are deductible on Form 1040, Schedule A as miscellaneous itemized deductions not subject to the 2% floor on miscellaneous itemized deductions, because they would not have been incurred if property had not been held by the bankruptcy estate. Can still e file 2011 taxes See IRC section 67(e). Can still e file 2011 taxes Administrative expenses of the bankruptcy estate attributable to conducting a trade or business for the production of estate rents or royalties are deductible in arriving at adjusted gross income on Form 1040, Schedules C, E, and F. Can still e file 2011 taxes Note. Can still e file 2011 taxes The bankruptcy estate uses Form 1041 as a transmittal for the tax return prepared using Form 1040 and its schedules. Can still e file 2011 taxes See Transmittal for Form 1040 under Tax Return Filing Requirements and Payment of Tax, later. Can still e file 2011 taxes Administrative expense loss. Can still e file 2011 taxes   If the administrative expenses of the bankruptcy estate are more than its gross income for a tax year, the excess amount may be carried back 3 years and forward 7 years. Can still e file 2011 taxes The amounts can only be carried to a tax year of the estate and never to a debtor's tax year. Can still e file 2011 taxes The excess amount to be carried back or forward is treated like a net operating loss (NOL) and must first be carried back to the earliest year possible. Can still e file 2011 taxes For a discussion of NOLs, see Publication 536. Can still e file 2011 taxes Attribute carryovers. Can still e file 2011 taxes   The bankruptcy estate may use its tax attributes the same way that the debtor would have used them. Can still e file 2011 taxes These items are determined as of the first day of the debtor's tax year in which the bankruptcy case begins. Can still e file 2011 taxes The bankruptcy estate assumes the following tax attributes from the debtor: NOL carryovers, Carryovers of excess charitable contributions, Recovery of tax benefit items, Credit carryovers, Capital loss carryovers, Basis, holding period, and character of assets, Method of accounting, Passive activity loss and credit carryovers, Unused at-risk deductions, and Other tax attributes provided in the regulations. Can still e file 2011 taxes   Certain tax attributes of the bankruptcy estate must be reduced by the amount of income that was previously excluded as a result of cancellation of debt during the bankruptcy proceeding. Can still e file 2011 taxes See Debt Cancellation, later. Can still e file 2011 taxes   When the bankruptcy estate is terminated (for example, when the case ends), the debtor assumes any remaining tax attributes previously taken over by the bankruptcy estate. Can still e file 2011 taxes The debtor also generally assumes any of the tax attributes, listed above, that arose during the administration of the bankruptcy estate. Can still e file 2011 taxes Note. Can still e file 2011 taxes The debtor does not assume the bankruptcy estate's administrative expense losses because they cannot be used by an individual taxpayer filing Form 1040. Can still e file 2011 taxes See Administrative expense loss, above. Can still e file 2011 taxes Passive and at-risk activities. Can still e file 2011 taxes   For bankruptcy cases beginning after November 8, 1992, passive activity carryover losses and credits and unused at-risk deductions are treated as tax attributes passing from the debtor to the bankruptcy estate, which the estate then passes back to the debtor when the bankruptcy estate terminates. Can still e file 2011 taxes Additionally, transfers to the debtor (other than by sale or exchange) of interests in passive or at-risk activities are treated as non-taxable exchanges. Can still e file 2011 taxes These transfers include the return of exempt property and abandonment of estate property to the debtor. Can still e file 2011 taxes Carrybacks from the debtor's activities. Can still e file 2011 taxes   The debtor cannot carry back any NOL or credit carryback from a tax year ending after the bankruptcy case has begun to any tax year ending before the case began. Can still e file 2011 taxes Carrybacks from the bankruptcy estate. Can still e file 2011 taxes   If the bankruptcy estate has an NOL that did not pass to the estate from the debtor under the attribute carryover rules, the estate can carry the loss back not only to its own earlier tax years but also to the debtor's tax years before the year the bankruptcy case began. Can still e file 2011 taxes The estate may also carry back excess credits, such as the general business credit, to the pre-bankruptcy tax years. Can still e file 2011 taxes Tax Reporting – Chapter 11 Cases Allocation of income and credits on information returns and required statement for returns for individual chapter 11 cases. Can still e file 2011 taxes    In chapter 11 cases, when an employer issues a Form W-2 reporting all of the debtor's wages, salary, or other compensation for a calendar year, and a portion of the earnings represent post-petition services includible in the estate's gross income, the Form W-2 amounts must be allocated between the estate and the debtor. Can still e file 2011 taxes The debtor-in-possession or trustee must allocate the income amount reported in box 1 and the income tax withheld reported in box 2 between the debtor and the estate. Can still e file 2011 taxes These allocations must reflect that the debtor's gross earnings from post-petition services and gross income from post-petition property are, generally, includible in the estate's gross income and not the debtor's gross income. Can still e file 2011 taxes The debtor and trustee may use a simple percentage method to allocate income and income tax withheld. Can still e file 2011 taxes The same method must be used to allocate the income and the withheld tax. Can still e file 2011 taxes Example. Can still e file 2011 taxes If 20% of the wages reported on Form W-2 for a calendar year were earned after the commencement of the case and are included in the estate's gross income, 20% of the withheld income tax reported on Form W-2 must also be claimed as a credit on the estate's income tax return. Can still e file 2011 taxes Likewise, 80% of wages must be reported by the debtor and 80% of the income tax withheld must be claimed as a credit on the debtor's income tax return. Can still e file 2011 taxes See IRC section 31(a). Can still e file 2011 taxes   If information returns are issued to the debtor for gross income, gross proceeds, or other reportable payments that should have been reported to the bankruptcy estate, the debtor-in-possession or trustee must allocate the improperly reported income in a reasonable manner between the debtor and the estate. Can still e file 2011 taxes In general, the allocation must ensure that any income and income tax withheld attributable to the post-petition period is reported on the estate's return, and any income and income tax withheld attributable to the pre-petition period is reported on the debtor's return. Can still e file 2011 taxes    IRS Notice 2006-83 requires the debtor to attach a statement to his or her individual income tax return (Form 1040) stating that the return is filed subject to a chapter 11 bankruptcy case. Can still e file 2011 taxes The statement must also: Show the allocations of income and income tax withheld, Describe the method used to allocate income and income tax withheld, and List the filing date of the bankruptcy case, the bankruptcy court in which the case is pending, the bankruptcy court case number, and the bankruptcy estate's EIN. Can still e file 2011 taxes Note. Can still e file 2011 taxes The debtor-in-possession or trustee must attach a similar statement to the bankruptcy estate's income tax return (Form 1041). Can still e file 2011 taxes   The model Notice 2006-83 Statement, shown above, may be used by debtors, debtors-in-possession, and trustees to satisfy the reporting requirement. Can still e file 2011 taxes Self-employment taxes in individual chapter 11 cases. Can still e file 2011 taxes   IRC section 1401 imposes a tax upon the self-employment income, that is, the net earnings from self-employment of an individual. Can still e file 2011 taxes Net earnings from self-employment are equal to the gross income derived by an individual from any trade or business carried on by such individual, less deductions attributable to the business. Can still e file 2011 taxes   Neither section 1115 of the Bankruptcy Code nor IRC section 1398 addresses the application of self-employment tax to the post-petition earnings of the individual debtor. Can still e file 2011 taxes Therefore, if the debtor continues to derive gross income from the performance of services as a self-employed individual after the commencement of the bankruptcy case, the debtor must continue to report the debtor's self-employment income on Schedule SE (Form 1040) of the debtor's income tax return. Can still e file 2011 taxes This schedule includes self-employment income earned post-petition and the attributable deductions. Can still e file 2011 taxes The debtor must pay any self-employment tax imposed by IRC section 1401. Can still e file 2011 taxes Employment taxes and employer's obligation to file Form W-2 in individual chapter 11 cases. Can still e file 2011 taxes   In chapter 11 cases, post-petition wages earned by a debtor are generally treated as gross income of the estate. Can still e file 2011 taxes However, section 1115 of the Bankruptcy Code (11 U. Can still e file 2011 taxes S. Can still e file 2011 taxes C. Can still e file 2011 taxes section 1115) does not affect the determination of what are deemed wages for Federal Insurance Contributions Act (FICA) tax, Federal Unemployment Tax Act (FUTA) tax, or Federal Income Tax Withholding purposes. Can still e file 2011 taxes See Notice 2006-83. Can still e file 2011 taxes   The reporting and withholding obligations of a debtor's employer also do not change. Can still e file 2011 taxes An employer should continue to report the wages and tax withholding on a Form W-2 issued under the debtor's name and social security number. Can still e file 2011 taxes Notice to persons required to file information returns (other than Form W-2, Wage and Tax Statement) in individual chapter 11 cases. Can still e file 2011 taxes   Within a reasonable time after the commencement of a chapter 11 bankruptcy case, the trustee or debtor-in-possession should provide notification of the bankruptcy estate's EIN to all persons (or entities) that are required to file information returns for the bankruptcy estate's gross income, gross proceeds, or other types of reportable payments. Can still e file 2011 taxes See IRC section 6109(a)(2). Can still e file 2011 taxes As these payments are the property of the estate under section 1115 of the Bankruptcy Code, the payors should report the gross income, gross proceeds, or other reportable payments on the appropriate information return using the estate's name and EIN as required under the IRC and regulations (see IRC sections 6041 through 6049). Can still e file 2011 taxes   The trustee or debtor-in-possession should not, however, provide the EIN to a person (or entity) filing Form W-2 reporting the debtor's wages or other compensation, as section 1115 of the Bankruptcy Code does not affect the determination of what constitutes wages for purposes of federal income tax withholding or FICA. Can still e file 2011 taxes See Notice 2006-83. Can still e file 2011 taxes An employer should continue to report all wage income and tax withholding, both pre-petition and post-petition, on a Form W-2 to the debtor under the debtor's social security number. Can still e file 2011 taxes   The debtor in a chapter 11 case is not required to file a new Form W-4 with an employer solely because the debtor filed a chapter 11 case and the post-petition wages are includible in the estate's income and not the debtor's income. Can still e file 2011 taxes However, a new Form W-4 may be necessary if the debtor is no longer entitled to claim the same number of allowances previously claimed because certain deductions or credits now belong to the estate. Can still e file 2011 taxes See Employment Tax Regulations section 31. Can still e file 2011 taxes 3402(f)(2)-1. Can still e file 2011 taxes Additionally, the debtor may wish to file a new Form W-4 to increase the income tax withheld from post-petition wages allocated to the estate to avoid having to make estimated tax payments for the estate. Can still e file 2011 taxes See IRC section 6654(a). Can still e file 2011 taxes Notice required in converted and dismissed cases. Can still e file 2011 taxes   When a chapter 11 bankruptcy case is closed, dismissed, or converted to a chapter 12 or 13 case, the bankruptcy estate ends as a separate taxable entity. Can still e file 2011 taxes The debtor should, within a reasonable time, send notice of such event to the persons (or entities) previously notified of the bankruptcy case. Can still e file 2011 taxes This helps to ensure that gross income, proceeds, and other reportable payments realized after the event are reported to the debtor under the correct TIN rather than to the estate. Can still e file 2011 taxes   When a chapter 11 case is converted to a chapter 7 case, the bankruptcy estate will continue to exist as a separate taxable entity. Can still e file 2011 taxes Gross income (other than post-conversion income from the debtor's services), gross proceeds, or other reportable payments should continue to be reported to the estate if they are property of the chapter 7 estate. Can still e file 2011 taxes However, income from services performed by the debtor after conversion of the case to chapter 7 is not property of the chapter 7 estate. Can still e file 2011 taxes After the conversion, the debtor should notify payors required to report the debtor's nonemployee compensation that compensation earned after the conversion should be reported using the debtor's name and TIN, not the estate's name and EIN. Can still e file 2011 taxes Employment taxes. Can still e file 2011 taxes   The trustee or debtor-in-possession must withhold income and social security taxes and file employment tax returns for any wages paid by the trustee or debtor, including wage claims paid as administrative expenses. Can still e file 2011 taxes See Publication 15, Circular E, Employer's Tax Guide, for details on employer tax responsibilities. Can still e file 2011 taxes   The trustee also has the duty to prepare and file Forms W-2 for wage claims paid by the trustee, regardless of whether the claims accrued before or during bankruptcy. Can still e file 2011 taxes For a further discussion of employment taxes, see Employment Taxes, later. Can still e file 2011 taxes Notice 2006-83 Statement Pending Bankruptcy Case The taxpayer, , filed a bankruptcy petition under chapter 11 of the Bankruptcy Code in the bankruptcy court for the District of . Can still e file 2011 taxes The bankruptcy court case number is . Can still e file 2011 taxes Gross income, and withheld federal income tax, reported on Form W-2, Forms 1099, Schedule K-1, and other information returns received under the taxpayer's name and social security number (or other taxpayer identification number) are allocated between the taxpayer's TIN and the bankruptcy estate's EIN as follows, using [describe allocation method]:. Can still e file 2011 taxes   Year Taxpayer   Estate 1. Can still e file 2011 taxes Form W-2, Payor: $   $     Withheld income tax shown on Form W-2 $   $   2. Can still e file 2011 taxes Form 1099-INT Payor: $   $     Withheld income tax (if any) shown on Form 1099-INT $   $   3. Can still e file 2011 taxes Form 1099-DIV Payor: $   $     Withheld income tax (if any) shown on Form 1099-DIV $   $   4. Can still e file 2011 taxes Form 1099-MISC Payor: $   $     Withheld income tax (if any) shown on Form 1099-MISC $   $   Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due Filing Requirements Filing threshold. Can still e file 2011 taxes   If the bankruptcy estate has gross income that meets or exceeds the minimum amount required for filing, the trustee or debtor-in-possession must file an income tax return on Form 1041. Can still e file 2011 taxes This amount is equal to the sum of the personal exemption amount plus the basic standard deduction for a married individual filing separately. Can still e file 2011 taxes   For 2012, the threshold filing amount for a bankruptcy estate is $9,750 (the sum of the $3,800 personal exemption plus the $5,950 standard deduction for married individuals filing separately). Can still e file 2011 taxes   These amounts are generally adjusted annually. Can still e file 2011 taxes See the present year Form 1041 Instructions at www. Can still e file 2011 taxes irs. Can still e file 2011 taxes gov/form1041 for the current dollar amounts. Can still e file 2011 taxes Accounting period. Can still e file 2011 taxes   A bankruptcy estate may have a fiscal year. Can still e file 2011 taxes However, this period cannot be longer than 12 months. Can still e file 2011 taxes Change of accounting period. Can still e file 2011 taxes   The bankruptcy estate may change its accounting period (tax year) once without IRS approval. Can still e file 2011 taxes This rule allows the bankruptcy trustee to close the estate's tax year early, before the expected termination of the bankruptcy estate. Can still e file 2011 taxes The trustee can then file a return for the first short tax year to get a quick determination of the estate's tax liability. Can still e file 2011 taxes Employer identification number. Can still e file 2011 taxes   The trustee or debtor-in-possession must obtain an EIN for a bankruptcy estate. Can still e file 2011 taxes The trustee or debtor-in-possession uses this EIN on all tax returns filed for the bankruptcy estate with the IRS, including estimated tax returns. Can still e file 2011 taxes    The social security number of the individual debtor cannot be used as the EIN for the bankruptcy estate. Can still e file 2011 taxes   Obtain an EIN for a bankruptcy estate by applying: Online by clicking on the EIN link at www. Can still e file 2011 taxes irs. Can still e file 2011 taxes gov/businesses/small. Can still e file 2011 taxes The EIN is issued immediately once the application information is validated. Can still e file 2011 taxes By telephone at 1-800-829-4933 from 7:00 a. Can still e file 2011 taxes m. Can still e file 2011 taxes to 7:00 p. Can still e file 2011 taxes m. Can still e file 2011 taxes in the trustee's or debtor-in-possession's local time zone. Can still e file 2011 taxes Assistance provided to callers from Alaska and Hawaii will be based on the hours of operation in the Pacific time zone, or By mailing or faxing Form SS-4, Application for Employer Identification Number. Can still e file 2011 taxes   If the trustee or debtor-in-possession has not received the bankruptcy estate's EIN by the time the return is due, write “Applied for” and the date you applied in the space for the EIN. Can still e file 2011 taxes For more details, see Pub. Can still e file 2011 taxes 583, Starting a Business and Keeping Records. Can still e file 2011 taxes   Trustees representing ten or more bankruptcy estates (other than estates that will be filing employment or excise tax returns) may request a series or block of EINs. Can still e file 2011 taxes Figuring tax due. Can still e file 2011 taxes   The bankruptcy estate figures its taxable income the same way an individual figures taxable income. Can still e file 2011 taxes However, the estate uses the tax rates for a married individual filing separately to calculate the tax on its taxable income. Can still e file 2011 taxes The estate is entitled to one personal exemption and may either itemize deductions or take the basic standard deduction for a married individual filing a separate return. Can still e file 2011 taxes The estate cannot take the higher standard deduction allowed for married persons filing separately who are 65 or older or blind. Can still e file 2011 taxes Tax rate schedule. Can still e file 2011 taxes The tax on income for bankruptcy estates is calculated using the tax rate schedule for Married Individuals Filing Separately not the Estates and Trusts tax rate schedule. Can still e file 2011 taxes When to file. Can still e file 2011 taxes   Calendar year bankruptcy estates must file Form 1041 by April 15th. Can still e file 2011 taxes Fiscal year bankruptcy estates must file on or before the 15th day of the 4th month following the close of its tax year. Can still e file 2011 taxes For example, an estate that has a tax year that ends on June 30th must file Form 1041 by October 15th of the tax year. Can still e file 2011 taxes If the due date falls on a Saturday, Sunday, or legal holiday, file on the next business day. Can still e file 2011 taxes Note. Can still e file 2011 taxes The bankruptcy estate is allowed an automatic 6-month extension of time to file the bankruptcy estate tax return upon filing the required application, Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns. Can still e file 2011 taxes Transmittal for Form 1040. Can still e file 2011 taxes   Form 1041 is used as a transmittal for Form 1040. Can still e file 2011 taxes If a return is required, the trustee or debtor-in-possession must complete the identification area at the top of Form 1041 and indicate the chapter under which the bankruptcy estate filed, either chapter 7 or chapter 11. Can still e file 2011 taxes   Prepare the bankruptcy estate's return by completing Form 1040. Can still e file 2011 taxes In the top margin of Form 1040, write “Attachment to Form 1041 —DO NOT DETACH. Can still e file 2011 taxes ” Then, attach Form 1040 to the Form 1041 transmittal. Can still e file 2011 taxes Enter the tax and payment amounts on lines 23 through 29 of Form 1041, then sign and date the return. Can still e file 2011 taxes An example of a bankruptcy estate's tax return is prepared below. Can still e file 2011 taxes Note. Can still e file 2011 taxes The filing of the bankruptcy estate's tax return does not relieve a debtor from the requirement to file his or her individual tax return on Form 1040. Can still e file 2011 taxes Payment of Tax Due Payment methods. Can still e file 2011 taxes   Payment of tax due may be made by check or money order or by credit or debit card. Can still e file 2011 taxes For information on how to make payments electronically by credit or debit card, go to irs. Can still e file 2011 taxes gov/e-pay. Can still e file 2011 taxes      Payments may also be made electronically using the Electronic Federal Tax Payment System (EFTPS), a free tax payment system that allows you to make payments online or by phone. Can still e file 2011 taxes To enroll in EFTPS, go to eftps. Can still e file 2011 taxes gov or call 1-800-555-4477. Can still e file 2011 taxes For more information see Publication 966, Electronic Federal Tax Payment System: A Guide to Getting Started. Can still e file 2011 taxes Payment voucher – Form 1041-V. Can still e file 2011 taxes   Form 1041-V accompanies payments made by check or money order for Form 1041. Can still e file 2011 taxes The voucher includes information about the bankruptcy estate, including the name of the bankruptcy estate, trustee, EIN, and amount due. Can still e file 2011 taxes Using Form 1041-V assists the IRS in processing the payment more accurately and efficiently. Can still e file 2011 taxes We recommend the use of Form 1041-V; however, there is no penalty if the voucher is not used. Can still e file 2011 taxes Estimated tax – Form 1041-ES. Can still e file 2011 taxes   In most cases, the trustee or debtor-in-possession must pay any required estimated tax due for the bankruptcy estate. Can still e file 2011 taxes See the Form 1041-ES Instructions for information on the minimum threshold amount required for filing Form 1041-ES, paying the estimated tax, and exceptions to filing. Can still e file 2011 taxes Employment Taxes The trustee or debtor-in-possession must withhold income and social security taxes and file employment tax returns for any wages paid by the trustee or debtor, including wage claims paid as administrative expenses. Can still e file 2011 taxes Until these employment taxes are deposited as required by the IRC, they should be set aside in a separate bank account to ensure that funds are available to satisfy the liability. Can still e file 2011 taxes If the employment taxes are not paid as required, the trustee may be held personally liable for payment of the taxes. Can still e file 2011 taxes   See Publication 15, (Circular E), Employer's Tax Guide, for details on employer tax responsibilities. Can still e file 2011 taxes Also see IRS Notice 931, Deposit Requirements for Employment Taxes, for details on the deposit rules, including the requirement that federal employment tax deposits be made by electronic funds transfer. Can still e file 2011 taxes The trustee also has a duty to prepare and file Forms W-2, Wage and Tax Statement, for wage claims paid by the trustee, regardless of whether the claims accrued before or during bankruptcy. Can still e file 2011 taxes If the debtor fails to prepare and file Forms W-2 for wages paid before bankruptcy, the trustee should instruct the employees to file a Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Can still e file 2011 taxes , with their individual income tax returns. Can still e file 2011 taxes Tax Return Example – Form 1041 This publication is not revised annually. Can still e file 2011 taxes Future changes to the forms and their instructions may not be reflected in this example. Can still e file 2011 taxes Note. Can still e file 2011 taxes The following return was prepared for tax year 2011. Can still e file 2011 taxes In 2011, the threshold filing amount for a bankruptcy estate was $9,500 (the sum of the $3,700 personal exemption plus the $5,800 standard deduction for married individuals filing separately). Can still e file 2011 taxes Facts and circumstances. Can still e file 2011 taxes   On December 15, 2010, Thomas Smith filed a bankruptcy petition under chapter 7. Can still e file 2011 taxes Joan Black was appointed trustee to administer the bankruptcy estate and to distribute the assets. Can still e file 2011 taxes   The estate received the following assets from Mr. Can still e file 2011 taxes Smith: A $100,000 certificate of deposit, Commercial rental real estate with a fair market value (FMV) of $280,000, and His personal residence with an FMV of $200,000. Can still e file 2011 taxes   Also, the estate received a $251,500 capital loss carryover. Can still e file 2011 taxes   Mr. Can still e file 2011 taxes Smith's bankruptcy case was closed on December 31, 2011. Can still e file 2011 taxes During 2011, Mr. Can still e file 2011 taxes Smith was relieved of $70,000 of debt by the bankruptcy court. Can still e file 2011 taxes The estate chose a calendar year as its tax year. Can still e file 2011 taxes Joan, the trustee, reviews the estate's transactions and reports the taxable events on the estate's final return. Can still e file 2011 taxes Schedule B (Form 1040). Can still e file 2011 taxes    The certificate of deposit earned $5,500 of interest during 2011. Can still e file 2011 taxes Joan reports this interest on Schedule B. Can still e file 2011 taxes She completes this schedule and enters the result on Form 1040. Can still e file 2011 taxes Form 4562. Can still e file 2011 taxes   Joan enters the depreciation allowed on Form 4562. Can still e file 2011 taxes She completes the form and enters the result on Schedule E. Can still e file 2011 taxes Schedule E (Form 1040). Can still e file 2011 taxes   The commercial real estate was rented through the date of sale. Can still e file 2011 taxes Joan reports the income and expenses on Schedule E. Can still e file 2011 taxes She enters the net income on Form 1040. Can still e file 2011 taxes Form 4797. Can still e file 2011 taxes   The commercial real estate was sold on July 1, 2011, for $280,000. Can still e file 2011 taxes The property was purchased in 2001 at a cost of $250,000. Can still e file 2011 taxes The total depreciation allowable as of the date of sale was $120,000. Can still e file 2011 taxes Additionally, $25,000 of selling expenses were incurred. Can still e file 2011 taxes Joan reports the gain or loss from the sale on Form 4797. Can still e file 2011 taxes She completes the form and enters the gain on Schedule D (Form 1040). Can still e file 2011 taxes   Mr. Can still e file 2011 taxes Smith's former residence was sold on September 30, 2011. Can still e file 2011 taxes The sale price was $200,000, the selling expenses were $20,000, and his adjusted basis was $130,000. Can still e file 2011 taxes This sale is excluded from gross income under IRC section 121. Can still e file 2011 taxes Note. Can still e file 2011 taxes Gains from the sale of personal residences are excluded from gross income up to $250,000 under IRC section 121 ($500,000 for married couples filing a joint return). Can still e file 2011 taxes Bankruptcy estates succeed to this exclusion at the commencement of the case. Can still e file 2011 taxes See Regulation section 1. Can still e file 2011 taxes 1398-3. Can still e file 2011 taxes Schedule D (Form 1040). Can still e file 2011 taxes   Joan completes Schedule D, taking into account the $250,000 capital loss carryover from 2010 ($251,500 transferred to the estate minus $1,500 used on the estate's 2010 return). Can still e file 2011 taxes She enters the results on Form 1040. Can still e file 2011 taxes Form 1040, page 1. Can still e file 2011 taxes   Joan completes page 1 of the Form 1040 and enters the adjusted gross income on the first line of Form 1040, page 2. Can still e file 2011 taxes Schedule A (Form 1040). Can still e file 2011 taxes   During 2011, the estate paid mortgage interest and real property tax on Mr. Can still e file 2011 taxes Smith's former residence. Can still e file 2011 taxes It also paid income tax to the state. Can still e file 2011 taxes Joan enters the mortgage interest, real estate tax, and income tax on Schedule A. Can still e file 2011 taxes Also, she reports the bankruptcy estate's administrative expenses as a miscellaneous deduction not subject to the 2% floor on miscellaneous itemized deductions. Can still e file 2011 taxes She completes the Schedule A and enters the result on page 2 of Form 1040. Can still e file 2011 taxes Form 1040, page 2. Can still e file 2011 taxes   Joan determines the estate's taxable income and figures its tax using the tax rate schedule for married filing separately. Can still e file 2011 taxes She then enters the estate's estimated tax payments and figures the amount the estate still owes. Can still e file 2011 taxes Form 982. Can still e file 2011 taxes   Joan completes the Schedule D Tax Worksheet to figure the capital loss carryover. Can still e file 2011 taxes Because $70,000 of debt was canceled, Joan must reduce the tax attributes of the estate by the amount of the canceled debt. Can still e file 2011 taxes See Debt Cancellation, later. Can still e file 2011 taxes After the bankruptcy case ends, Mr. Can still e file 2011 taxes Smith will assume the estate's tax attributes. Can still e file 2011 taxes Mr. Can still e file 2011 taxes Smith will assume a capital loss carryover of $53,500 ($123,500 carryover minus the $70,000 attribute reduction) for use in preparation of his individual tax return (Form 1040). Can still e file 2011 taxes Note. Can still e file 2011 taxes If the bankruptcy estate had continued, the capital loss carryover would be available to the bankruptcy estate for the 2012 tax year. Can still e file 2011 taxes Form 1041. Can still e file 2011 taxes   Joan enters the total tax, estimated tax payments, and tax due from Form 1040 on Form 1041. Can still e file 2011 taxes She completes the identification area at the top of Form 1041, then signs and dates the return as the trustee on behalf of the bankruptcy estate. Can still e file 2011 taxes This image is too large to be displayed in the current screen. Can still e file 2011 taxes Please click the link to view the image. Can still e file 2011 taxes Sample Form 1040 - page 1 This image is too large to be displayed in the current screen. Can still e file 2011 taxes Please click the link to view the image. Can still e file 2011 taxes Sample Form 1040 - page 2 This image is too large to be displayed in the current screen. Can still e file 2011 taxes Please click the link to view the image. Can still e file 2011 taxes Sample Schedule A This image is too large to be displayed in the current screen. Can still e file 2011 taxes Please click the link to view the image. Can still e file 2011 taxes Sample Schedule B This image is too large to be displayed in the current screen. Can still e file 2011 taxes Please click the link to view the image. Can still e file 2011 taxes Sample Schedule D This image is too large to be displayed in the current screen. Can still e file 2011 taxes Please click the link to view the image. Can still e file 2011 taxes Sample Schedule E This image is too large to be displayed in the current screen. Can still e file 2011 taxes Please click the link to view the image. Can still e file 2011 taxes Sample Form 4797 - page 1 This image is too large to be displayed in the current screen. Can still e file 2011 taxes Please click the link to view the image. Can still e file 2011 taxes Sample Form 2119 This image is too large to be displayed in the current screen. Can still e file 2011 taxes Please click the link to view the image. Can still e file 2011 taxes Sample Form 4797 - page 2 This image is too large to be displayed in the current screen. Can still e file 2011 taxes Please click the link to view the image. Can still e file 2011 taxes Sample Form 4562 This image is too large to be displayed in the current screen. Can still e file 2011 taxes Please click the link to view the image. Can still e file 2011 taxes Sample Capital Loss Carryover Worksheet This image is too large to be displayed in the current screen. Can still e file 2011 taxes Please click the link to view the image. Can still e file 2011 taxes Sample Form 982 Capital Loss Carryover Worksheet—Lines 6 and 14 Use this worksheet to figure your capital loss carryovers from 2010 to 2011 if your 2010 Schedule D, line 21, is a loss and (a) that loss is a smaller loss than the loss on your 2010 Schedule D, line 16, or (b) the amount on your 2010 Form 1040, line 41 (or your 2010 Form 1040NR, line 38, if applicable) is less than zero. Can still e file 2011 taxes Otherwise, you do not have any carryovers. Can still e file 2011 taxes 1. Can still e file 2011 taxes Enter the amount from your 2010 Form 1040, line 41, or Form 1040NR, line 38. Can still e file 2011 taxes If a loss, enclose the amount in parentheses 1. Can still e file 2011 taxes 19,880   2. Can still e file 2011 taxes Enter the loss from your 2010 Schedule D, line 21, as a positive amount 2. Can still e file 2011 taxes 1,500   3. Can still e file 2011 taxes Combine lines 1 and 2. Can still e file 2011 taxes If zero or less, enter -0- 3. Can still e file 2011 taxes 21,380   4. Can still e file 2011 taxes Enter the smaller of line 2 or line 3 4. Can still e file 2011 taxes 1,500     If line 7 of your 2010 Schedule D is a loss, go to line 5; otherwise, enter -0- on line 5 and go to line 9. Can still e file 2011 taxes       5. Can still e file 2011 taxes Enter the loss from your 2010 Schedule D, line 7, as a positive amount 5. Can still e file 2011 taxes 0   6. Can still e file 2011 taxes Enter any gain from your 2010 Schedule D, line 15. Can still e file 2011 taxes If a loss, enter -0- 6. Can still e file 2011 taxes         7. Can still e file 2011 taxes Add lines 4 and 6 7. Can still e file 2011 taxes 1,500   8. Can still e file 2011 taxes Short-term capital loss carryover for 2011. Can still e file 2011 taxes Subtract line 7 from line 5. Can still e file 2011 taxes If zero or less, enter -0-. Can still e file 2011 taxes If more than zero, also enter this amount on Schedule D, line 6 8. Can still e file 2011 taxes 0     If line 15 of your 2010 Schedule D is a loss, go to line 9; otherwise, skip lines 9 through 13. Can still e file 2011 taxes       9. Can still e file 2011 taxes Enter the loss from your 2010 Schedule D, line 15, as a positive amount 9. Can still e file 2011 taxes 251,500   10. Can still e file 2011 taxes Enter any gain from your 2010 Schedule D, line 7. Can still e file 2011 taxes If a loss, enter -0- 10. Can still e file 2011 taxes 0       11. Can still e file 2011 taxes Subtract line 5 from line 4. Can still e file 2011 taxes If zero or less, enter -0- 11. Can still e file 2011 taxes 1,500       12. Can still e file 2011 taxes Add lines 10 and 11 12. Can still e file 2011 taxes 1,500   13. Can still e file 2011 taxes Long-term capital loss carryover for 2011. Can still e file 2011 taxes Subtract line 12 from line 9. Can still e file 2011 taxes If zero or less, enter -0-. Can still e file 2011 taxes If more than zero, also enter this amount on Schedule D, line 14 13. Can still e file 2011 taxes 250,000                       Partnerships and Corporations Filing Requirements A separate taxable estate is not created when a partnership or corporation files a bankruptcy petition and their tax return filing requirements do not change. Can still e file 2011 taxes The debtor-in-possession, court appointed trustee, assignee, or receiver must file the entity's income tax returns on Form 1065, Form 1120 or, Form 1120S. Can still e file 2011 taxes In cases where a trustee or receiver is not appointed, the debtor-in-possession continues business operations and remains in possession of the business' property during the bankruptcy proceeding. Can still e file 2011 taxes The debtor-in-possession, rather than the general partner of a partnership or corporate officer of a corporation, assumes the fiduciary responsibility to file the business' tax returns. Can still e file 2011 taxes Partnerships The filing requirements for a partnership in a bankruptcy proceeding do not change. Can still e file 2011 taxes However, the responsibility to file the required returns becomes that of the court appointed trustee, receiver, or debtor-in-possession. Can still e file 2011 taxes A partnership's debt that is canceled as a result of the bankruptcy proceeding is not included in the partnership's income. Can still e file 2011 taxes However, It may or may not be included in the individual partners' income. Can still e file 2011 taxes See Partnerships, below under Debt Cancellation. Can still e file 2011 taxes Corporations The filing requirements for a corporation in a bankruptcy proceeding also do not change. Can still e file 2011 taxes A bankruptcy trustee, receiver, or debtor-in-possession, having possession of or holding title to substantially all of the property or business operations of the debtor corporation, must file the debtor's corporate income tax return for the tax year. Can still e file 2011 taxes The following discussion only highlights bankruptcy tax rules applying to corporations. Can still e file 2011 taxes The complex details of corporate bankruptcy reorganizations are beyond the scope of this publication. Can still e file 2011 taxes Therefore, you may wish to seek the help of a professional tax advisor. Can still e file 2011 taxes See Corporations under Debt Cancellation for information about a corporation's debt canceled in a bankruptcy proceeding. Can still e file 2011 taxes Tax-Free Reorganizations The tax-free reorganization provisions of the Internal Revenue Code allow a corporation to transfer all or part of its assets to another corporation in a bankruptcy under title 11 of the United States Code or in a similar case. Can still e file 2011 taxes However, under the reorganization plan, the stock or securities of the corporation to which the assets are transferred must be distributed in a transaction that qualifies under IRC section 354, 355, or 356. Can still e file 2011 taxes A “similar case” includes a receivership, foreclosure, or other similar proceeding in a federal or state court. Can still e file 2011 taxes In these cases, any party to the reorganization must be under the jurisdiction of the court and the transfer of assets under the plan of reorganization must be approved by the court. Can still e file 2011 taxes In a receivership, foreclosure, or similar proceeding before a federal or state agency involving certain financial institutions, the agency is treated as a court. Can still e file 2011 taxes Generally, IRC section 354 provides that no gain or loss is recognized if a corporation's stock is exchanged solely for stock or securities in a corporation that is a party to the reorganization under a qualifying reorganization plan. Can still e file 2011 taxes In this case, shareholders in the bankrupt corporation would recognize no gain or loss if they exchange their stock solely for stock or securities of the corporation acquiring the bankrupt corporation's assets. Can still e file 2011 taxes IRC section 355 generally provides that no gain or loss is recognized by a shareholder if a corporation distributes solely stock or securities of another corporation that the distributing corporation controls immediately before the distribution. Can still e file 2011 taxes IRC section 356 allows tax-free exchanges in situations that would qualify under IRC section 354 or 355, except that other property or money, in addition to the permitted stock or securities, is received by the shareholder. Can still e file 2011 taxes In this situation, gain is recognized by the shareholder, but only to the extent of the money and the FMV of the other property received. Can still e file 2011 taxes No loss is recognized in this situation. Can still e file 2011 taxes Exemption from tax return filing A trustee, receiver, or assignee of a corporation in bankruptcy, receivership, or in the process of dissolving, may apply to the IRS for relief from filing federal income tax returns for the corporation. Can still e file 2011 taxes To qualify, the corporation must have ceased business operations and have no assets nor income for the tax year. Can still e file 2011 taxes The exemption request must be submitted to the local IRS Insolvency Office handling the case. Can still e file 2011 taxes The request to the IRS must include the name, address, and EIN of the corporation and a statement of the facts (with any supporting documents) showing why the debtor needs relief from the filing requirements. Can still e file 2011 taxes The request must also include the following statement: “I hereby request relief from filing federal income tax returns for tax years ending _____ for the above-named corporation and declare under penalties of perjury that to the best of my knowledge and belief the information contained herein is correct. Can still e file 2011 taxes ” The statement must be signed by the trustee, receiver or assignee. Can still e file 2011 taxes The statement must also include notice of appointment to act on behalf of the corporation (this is not required for bankruptcy trustees or debtors-in-possession). Can still e file 2011 taxes The IRS will act on your request within 90 days. Can still e file 2011 taxes Disclosure of return information to trustee. Can still e file 2011 taxes   Upon written request, current and earlier returns of the debtor are open to inspection by or disclosure to the trustee or receiver. Can still e file 2011 taxes However, in bankruptcy cases other than those of individuals filing under chapter 7 or 11, such as a corporate bankruptcy, the IRS must find that the trustee has a material interest that will be affected by information on the return. Can still e file 2011 taxes Material interest is generally defined as a financial or monetary interest. Can still e file 2011 taxes Material interest is not limited to the trustee's responsibility to file a return on behalf of the bankruptcy estate. Can still e file 2011 taxes Receiverships Court-established receiverships sometimes arise in connection with bankruptcies. Can still e file 2011 taxes Certain court-established receiverships should be treated as qualified settlement funds ("QSFs") for purposes of IRC section 468B and the underlying Treasury Regulations. Can still e file 2011 taxes QSFs are required to file an annual income tax return, Form 1120-SF, U. Can still e file 2011 taxes S. Can still e file 2011 taxes Income Tax Return for Settlement Funds. Can still e file 2011 taxes More information about QSFs may be found in Treasury Regulation sections 1. Can still e file 2011 taxes 468B-1 through -5. Can still e file 2011 taxes Determination of Tax The determination of the proper amount of tax due for a tax year begins with the bankruptcy estate's filing of Form 1041, and the individual debtor's filing of Form 1040, or for bankrupt entities filing Forms 1065, 1120, or 1120S. Can still e file 2011 taxes After a return is filed, the IRS will either accept the return as filed or select the return for examination. Can still e file 2011 taxes Under examination the IRS may redetermine the tax liability shown on the return. Can still e file 2011 taxes If the bankruptcy estate or debtor disagrees with the redetermined tax due, the tax as redetermined by the IRS may be contested in the bankruptcy court, or Tax Court, as applicable. Can still e file 2011 taxes See Court Jurisdiction over Tax Matters, later. Can still e file 2011 taxes Prompt Determination Requests Pursuant to Rev. Can still e file 2011 taxes Proc. Can still e file 2011 taxes 2006-24, 2006-22 I. Can still e file 2011 taxes R. Can still e file 2011 taxes B. Can still e file 2011 taxes 943, www. Can still e file 2011 taxes irs. Can still e file 2011 taxes gov/irb/2006-22_IRB/ar12, as modified by Announcement 2011-77, www. Can still e file 2011 taxes irs. Can still e file 2011 taxes gov/irb/2011-51_IRB/ar13, the bankruptcy trustee may request a determination of any unpaid tax liability incurred by the bankruptcy estate during the administration of the case, by filing a tax return and a request for such determination with the IRS. Can still e file 2011 taxes Unless the return is fraudulent or contains a material misrepresentation, the estate, trustee, debtor, and any successor to the debtor are discharged from liability upon payment of the tax: As determined by the IRS, As determined by the bankruptcy court, after completion of the IRS examination, or As shown on the return, if the IRS does not: Notify the trustee within 60 days after the request for determination that the return has been selected for examination, or Complete the examination and notify the trustee of any tax due within 180 days after the request (or any additional time permitted by the bankruptcy court). Can still e file 2011 taxes Making the request for determination. Can still e file 2011 taxes   As detailed in Rev. Can still e file 2011 taxes Proc. Can still e file 2011 taxes 2006-24, as modified by Announcement 2011-77, to request a prompt determination of any unpaid tax liability of the estate, the trustee must file a signed written request, in duplicate, with the Internal Revenue Service, Centralized Insolvency Operation, P. Can still e file 2011 taxes O. Can still e file 2011 taxes Box 7346, Philadelphia, PA 19101–7346 (marked “Request for Prompt Determination”). Can still e file 2011 taxes   The request must be submitted in duplicate and must be executed under penalties of perjury. Can still e file 2011 taxes In addition, the trustee must submit along with the request an exact copy of the return(s) filed by the trustee with the IRS for each completed tax period. Can still e file 2011 taxes The request must contain the following information: A statement indicating that it is a Request for Prompt Determination of Tax Liability, specifying the type of return and tax period for each return being filed. Can still e file 2011 taxes The name and location of the office where the return was filed. Can still e file 2011 taxes The name of the debtor. Can still e file 2011 taxes Debtor's social security number, TIN, or EIN. Can still e file 2011 taxes Type of bankruptcy estate. Can still e file 2011 taxes Bankruptcy case number. Can still e file 2011 taxes Court where the bankruptcy case is pending. Can still e file 2011 taxes   The copy of the return(s) submitted with the request must be an exact copy of a valid return. Can still e file 2011 taxes A request for prompt determination will be considered incomplete and returned to the trustee if it is filed with a copy of a document that does not qualify as a valid return. Can still e file 2011 taxes    To qualify as valid, a return must meet certain criteria, including a signature under penalties of perjury. Can still e file 2011 taxes A document filed by the trustee with the jurat stricken, deleted, or modified will not qualify as a valid return. Can still e file 2011 taxes Examination of return. Can still e file 2011 taxes   The IRS will notify the trustee within 60 days from receipt of the request whether the return filed by the trustee has been selected for examination or has been accepted as filed. Can still e file 2011 taxes If the return is selected for examination, it will be examined as soon as possible. Can still e file 2011 taxes The IRS will notify the trustee of any tax due within 180 days from receipt of the application or within any additional time permitted by the bankruptcy court. Can still e file 2011 taxes   If a prompt determination request is incomplete, all the documents received by the IRS will be returned to the trustee by the assigned Field Insolvency Office with an explanation identifying the missing item(s) and instructions to re-file the request once corrected. Can still e file 2011 taxes   Once corrected, the request must be filed with the IRS at the Field Insolvency Office address specified in the correspondence accompanying the returned incomplete request. Can still e file 2011 taxes   In the case of an incomplete request submitted with a copy of an invalid return document, the trustee must file a valid original return with the appropriate IRS office and submit a copy of that return with the corrected request when the request is re-filed. Can still e file 2011 taxes Note. Can still e file 2011 taxes An incomplete request includes those submitted with a copy of a return form, the original of which does not qualify as a valid return. Can still e file 2011 taxes   The 60-day period to notify the trustee whether the return is accepted as filed or has been selected for examination does not begin to run until a complete request package is recei
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Tax Relief for Victims of Hurricane Isaac in Mississippi

LA/MS-2012-14, Sept. 5, 2012

Updated 10/01/12 to include Copiah, Franklin, Jefferson, Jones and Lamar counties.

Updated 9/10/12 to include Adams, Amite, Clarke, Forrest, George, Hinds, Lincoln, Marion, Pike, Stone, Walthall, Warren and Wilkinson counties.

NEW ORLEANS — Victims of Hurricane Isaac that began on Aug. 26, 2012 in parts of Mississippi may qualify for tax relief from the Internal Revenue Service.

Following recent disaster declarations for individual assistance issued by the Federal Emergency Management Agency, the IRS announced today that affected taxpayers in Mississippi will receive tax relief, and other locations may be added in coming days based on additional damage assessments by FEMA.

The President has declared the counties of Adams, Amite, Clarke, Copiah, Forrest, Franklin, George, Hancock, Harrison, Hinds, Jackson, Jefferson, Jones, Lamar, Lincoln, Marion, Pearl River, Pike, Stone, Walthall, Warren and Wilkinson a federal disaster area. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Aug. 26, and on or before Jan. 11, 2013, have been postponed to Jan. 11, 2013. This includes the quarterly estimated tax payment due on Sept. 17, 2012.

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Aug. 26, and on or before Sept. 10, as long as the deposits are made by Sept. 10, 2012.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request this tax relief.

Covered Disaster Area

The counties listed above constitutes a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and is entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until Jan. 11, 2013, to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Aug. 26 and on or before Jan. 11, 2013.

The IRS also gives affected taxpayers until Jan. 11, 2013, to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after Aug. 26 and on or before Jan. 11, 2013.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after Aug. 26 and on or before Sept. 10 provided the taxpayer makes these deposits by Sept. 10.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.

Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “MISSISSIPPI/HURRICANE ISAAC” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, IRS.gov, or order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040.

Page Last Reviewed or Updated: 14-Aug-2013

The Can Still E File 2011 Taxes

Can still e file 2011 taxes 20. Can still e file 2011 taxes   Standard Deduction Table of Contents What's New Introduction Standard Deduction Amount Standard Deduction for Dependents Who Should ItemizeWhen to itemize. Can still e file 2011 taxes Married persons who filed separate returns. Can still e file 2011 taxes What's New Standard deduction increased. Can still e file 2011 taxes  The standard deduction for some taxpayers who do not itemize their deductions on Schedule A (Form 1040) is higher for 2013 than it was for 2012. Can still e file 2011 taxes The amount depends on your filing status. Can still e file 2011 taxes You can use the 2013 Standard Deduction Tables in this chapter to figure your standard deduction. Can still e file 2011 taxes Introduction This chapter discusses the following topics. Can still e file 2011 taxes How to figure the amount of your standard deduction. Can still e file 2011 taxes The standard deduction for dependents. Can still e file 2011 taxes Who should itemize deductions. Can still e file 2011 taxes Most taxpayers have a choice of either taking a standard deduction or itemizing their deductions. Can still e file 2011 taxes If you have a choice, you can use the method that gives you the lower tax. Can still e file 2011 taxes The standard deduction is a dollar amount that reduces your taxable income. Can still e file 2011 taxes It is a benefit that eliminates the need for many taxpayers to itemize actual deductions, such as medical expenses, charitable contributions, and taxes, on Schedule A (Form 1040). Can still e file 2011 taxes The standard deduction is higher for taxpayers who: Are 65 or older, or Are blind. Can still e file 2011 taxes You benefit from the standard deduction if your standard deduction is more than the total of your allowable itemized deductions. Can still e file 2011 taxes Persons not eligible for the standard deduction. Can still e file 2011 taxes   Your standard deduction is zero and you should itemize any deductions you have if: Your filing status is married filing separately, and your spouse itemizes deductions on his or her return, You are filing a tax return for a short tax year because of a change in your annual accounting period, or You are a nonresident or dual-status alien during the year. Can still e file 2011 taxes You are considered a dual-status alien if you were both a nonresident and resident alien during the year. Can still e file 2011 taxes Note. Can still e file 2011 taxes If you are a nonresident alien who is married to a U. Can still e file 2011 taxes S. Can still e file 2011 taxes citizen or resident alien at the end of the year, you can choose to be treated as a U. Can still e file 2011 taxes S. Can still e file 2011 taxes resident. Can still e file 2011 taxes (See Publication 519, U. Can still e file 2011 taxes S. Can still e file 2011 taxes Tax Guide for Aliens. Can still e file 2011 taxes ) If you make this choice, you can take the standard deduction. Can still e file 2011 taxes If an exemption for you can be claimed on another person's return (such as your parents' return), your standard deduction may be limited. Can still e file 2011 taxes See Standard Deduction for Dependents, later. Can still e file 2011 taxes Standard Deduction Amount The standard deduction amount depends on your filing status, whether you are 65 or older or blind, and whether an exemption can be claimed for you by another taxpayer. Can still e file 2011 taxes Generally, the standard deduction amounts are adjusted each year for inflation. Can still e file 2011 taxes The standard deduction amounts for most people are shown in Table 20-1. Can still e file 2011 taxes Decedent's final return. Can still e file 2011 taxes   The standard deduction for a decedent's final tax return is the same as it would have been had the decedent continued to live. Can still e file 2011 taxes However, if the decedent was not 65 or older at the time of death, the higher standard deduction for age cannot be claimed. Can still e file 2011 taxes Higher Standard Deduction for Age (65 or Older) If you are age 65 or older on the last day of the year and do not itemize deductions, you are entitled to a higher standard deduction. Can still e file 2011 taxes You are considered 65 on the day before your 65th birthday. Can still e file 2011 taxes Therefore, you can take a higher standard deduction for 2013 if you were born before January 2, 1949. Can still e file 2011 taxes Use Table 20-2 to figure the standard deduction amount. Can still e file 2011 taxes Higher Standard Deduction for Blindness If you are blind on the last day of the year and you do not itemize deductions, you are entitled to a higher standard deduction. Can still e file 2011 taxes Not totally blind. Can still e file 2011 taxes   If you are not totally blind, you must get a certified statement from an eye doctor (ophthalmologist or optometrist) that: You cannot see better than 20/200 in the better eye with glasses or contact lenses, or Your field of vision is 20 degrees or less. Can still e file 2011 taxes   If your eye condition is not likely to improve beyond these limits, the statement should include this fact. Can still e file 2011 taxes You must keep the statement in your records. Can still e file 2011 taxes   If your vision can be corrected beyond these limits only by contact lenses that you can wear only briefly because of pain, infection, or ulcers, you can take the higher standard deduction for blindness if you otherwise qualify. Can still e file 2011 taxes Spouse 65 or Older or Blind You can take the higher standard deduction if your spouse is age 65 or older or blind and: You file a joint return, or You file a separate return and can claim an exemption for your spouse because your spouse had no gross income and cannot be claimed as a dependent by another taxpayer. Can still e file 2011 taxes You cannot claim the higher standard deduction for an individual other than yourself and your spouse. Can still e file 2011 taxes Examples The following examples illustrate how to determine your standard deduction using Tables 20-1 and 20-2. Can still e file 2011 taxes Example 1. Can still e file 2011 taxes Larry, 46, and Donna, 33, are filing a joint return for 2013. Can still e file 2011 taxes Neither is blind, and neither can be claimed as a dependent. Can still e file 2011 taxes They decide not to itemize their deductions. Can still e file 2011 taxes They use Table 20-1. Can still e file 2011 taxes Their standard deduction is $12,200. Can still e file 2011 taxes Example 2. Can still e file 2011 taxes The facts are the same as in Example 1 except that Larry is blind at the end of 2013. Can still e file 2011 taxes Larry and Donna use Table 20-2. Can still e file 2011 taxes Their standard deduction is $13,400. Can still e file 2011 taxes Example 3. Can still e file 2011 taxes Bill and Lisa are filing a joint return for 2013. Can still e file 2011 taxes Both are over age 65. Can still e file 2011 taxes Neither is blind, and neither can be claimed as a dependent. Can still e file 2011 taxes If they do not itemize deductions, they use Table 20-2. Can still e file 2011 taxes Their standard deduction is $14,600. Can still e file 2011 taxes Standard Deduction for Dependents The standard deduction for an individual who can be claimed as a dependent on another person's tax return is generally limited to the greater of: $1,000, or The individual's earned income for the year plus $350 (but not more than the regular standard deduction amount, generally $6,100). Can still e file 2011 taxes However, if the individual is 65 or older or blind, the standard deduction may be higher. Can still e file 2011 taxes If you (or your spouse, if filing jointly) can be claimed as a dependent on someone else's return, use Table 20-3 to determine your standard deduction. Can still e file 2011 taxes Earned income defined. Can still e file 2011 taxes   Earned income is salaries, wages, tips, professional fees, and other amounts received as pay for work you actually perform. Can still e file 2011 taxes    For purposes of the standard deduction, earned income also includes any part of a scholarship or fellowship grant that you must include in your gross income. Can still e file 2011 taxes See Scholarships and fellowships in chapter 12 for more information on what qualifies as a scholarship or fellowship grant. Can still e file 2011 taxes Example 1. Can still e file 2011 taxes Michael is single. Can still e file 2011 taxes His parents can claim an exemption for him on their 2013 tax return. Can still e file 2011 taxes He has interest income of $780 and wages of $150. Can still e file 2011 taxes He has no itemized deductions. Can still e file 2011 taxes Michael uses Table 20-3 to find his standard deduction. Can still e file 2011 taxes He enters $150 (his earned income) on line 1, $500 ($150 + $350) on line 3, $1,000 (the larger of $500 and $1,000) on line 5, and $6,100 on line 6. Can still e file 2011 taxes His standard deduction, on line 7a, is $1,000 (the smaller of $1,000 and $6,100). Can still e file 2011 taxes Example 2. Can still e file 2011 taxes Joe, a 22-year-old full-time college student, can be claimed as a dependent on his parents' 2013 tax return. Can still e file 2011 taxes Joe is married and files a separate return. Can still e file 2011 taxes His wife does not itemize deductions on her separate return. Can still e file 2011 taxes Joe has $1,500 in interest income and wages of $3,800. Can still e file 2011 taxes He has no itemized deductions. Can still e file 2011 taxes Joe finds his standard deduction by using Table 20-3. Can still e file 2011 taxes He enters his earned income, $3,800 on line 1. Can still e file 2011 taxes He adds lines 1 and 2 and enters $4,150 on line 3. Can still e file 2011 taxes On line 5, he enters $4,150, the larger of lines 3 and 4. Can still e file 2011 taxes Because Joe is married filing a separate return, he enters $6,100 on line 6. Can still e file 2011 taxes On line 7a he enters $4,150 as his standard deduction because it is smaller than $6,100, the amount on line 6. Can still e file 2011 taxes Example 3. Can still e file 2011 taxes Amy, who is single, can be claimed as a dependent on her parents' 2013 tax return. Can still e file 2011 taxes She is 18 years old and blind. Can still e file 2011 taxes She has interest income of $1,300 and wages of $2,900. Can still e file 2011 taxes She has no itemized deductions. Can still e file 2011 taxes Amy uses Table 20-3 to find her standard deduction. Can still e file 2011 taxes She enters her wages of $2,900 on line 1. Can still e file 2011 taxes She adds lines 1 and 2 and enters $3,250 on line 3. Can still e file 2011 taxes On line 5, she enters $3,250, the larger of lines 3 and 4. Can still e file 2011 taxes Because she is single, Amy enters $6,100 on line 6. Can still e file 2011 taxes She enters $3,250 on line 7a. Can still e file 2011 taxes This is the smaller of the amounts on lines 5 and 6. Can still e file 2011 taxes Because she checked one box in the top part of the worksheet, she enters $1,500 on line 7b. Can still e file 2011 taxes She then adds the amounts on lines 7a and 7b and enters her standard deduction of $4,750 on line 7c. Can still e file 2011 taxes Example 4. Can still e file 2011 taxes Ed is single. Can still e file 2011 taxes His parents can claim an exemption for him on their 2013 tax return. Can still e file 2011 taxes He has wages of $7,000, interest income of $500, and a business loss of $3,000. Can still e file 2011 taxes He has no itemized deductions. Can still e file 2011 taxes Ed uses Table 20-3 to figure his standard deduction. Can still e file 2011 taxes He enters $4,000 ($7,000 - $3,000) on line 1. Can still e file 2011 taxes He adds lines 1 and 2 and enters $4,350 on line 3. Can still e file 2011 taxes On line 5 he enters $4,350, the larger of lines 3 and 4. Can still e file 2011 taxes Because he is single, Ed enters $6,100 on line 6. Can still e file 2011 taxes On line 7a he enters $4,350 as his standard deduction because it is smaller than $6,100, the amount on line 6. Can still e file 2011 taxes Who Should Itemize You should itemize deductions if your total deductions are more than the standard deduction amount. Can still e file 2011 taxes Also, you should itemize if you do not qualify for the standard deduction, as discussed earlier under Persons not eligible for the standard deduction . Can still e file 2011 taxes You should first figure your itemized deductions and compare that amount to your standard deduction to make sure you are using the method that gives you the greater benefit. Can still e file 2011 taxes You may be subject to a limit on some of your itemized deductions if your adjusted gross income is more than: $250,000 if single ($275,000 if head of household, $300,000 if married filing jointly or qualifying widow(er); or $150,000 if married filing separately). Can still e file 2011 taxes See chapter 29 or the instructions for Schedule A (Form 1040) for more information on figuring the correct amount of your itemized deductions. Can still e file 2011 taxes When to itemize. Can still e file 2011 taxes   You may benefit from itemizing your deductions on Schedule A (Form 1040) if you: Do not qualify for the standard deduction, or the amount you can claim is limited, Had large uninsured medical and dental expenses during the year, Paid interest and taxes on your home, Had large unreimbursed employee business expenses or other miscellaneous deductions, Had large uninsured casualty or theft losses, Made large contributions to qualified charities, or Have total itemized deductions that are more than the standard deduction to which you otherwise are entitled. Can still e file 2011 taxes These deductions are explained in chapters 21–28. Can still e file 2011 taxes    If you decide to itemize your deductions, complete Schedule A and attach it to your Form 1040. Can still e file 2011 taxes Enter the amount from Schedule A, line 29, on Form 1040, line 40. Can still e file 2011 taxes Electing to itemize for state tax or other purposes. Can still e file 2011 taxes   Even if your itemized deductions are less than your standard deduction, you can elect to itemize deductions on your federal return rather than take the standard deduction. Can still e file 2011 taxes You may want to do this if, for example, the tax benefit of itemizing your deductions on your state tax return is greater than the tax benefit you lose on your federal return by not taking the standard deduction. Can still e file 2011 taxes To make this election, you must check the box on line 30 of Schedule A. Can still e file 2011 taxes Changing your mind. Can still e file 2011 taxes   If you do not itemize your deductions and later find that you should have itemized — or if you itemize your deductions and later find you should not have — you can change your return by filing Form 1040X, Amended U. Can still e file 2011 taxes S. Can still e file 2011 taxes Individual Income Tax Return. Can still e file 2011 taxes See Amended Returns and Claims for Refund in chapter 1 for more information on amended returns. Can still e file 2011 taxes Married persons who filed separate returns. Can still e file 2011 taxes   You can change methods of taking deductions only if you and your spouse both make the same changes. Can still e file 2011 taxes Both of you must file a consent to assessment for any additional tax either one may owe as a result of the change. Can still e file 2011 taxes    You and your spouse can use the method that gives you the lower total tax, even though one of you may pay more tax than you would have paid by using the other method. Can still e file 2011 taxes You both must use the same method of claiming deductions. Can still e file 2011 taxes If one itemizes deductions, the other should itemize because he or she will not qualify for the standard deduction. Can still e file 2011 taxes See Persons not eligible for the standard deduction , earlier. Can still e file 2011 taxes 2013 Standard Deduction Tables If you are married filing a separate return and your spouse itemizes deductions, or if you are a dual-status alien, you cannot take the standard deduction even if you were born before January 2, 1949, or are blind. Can still e file 2011 taxes Table 20-1. Can still e file 2011 taxes Standard Deduction Chart for Most People* If your filing status is. Can still e file 2011 taxes . Can still e file 2011 taxes . Can still e file 2011 taxes Your standard deduction is: Single or Married filing separately $6,100 Married filing jointly or Qualifying widow(er) with dependent child 12,200 Head of household 8,950 *Do not use this chart if you were born before January 2, 1949, are blind, or if someone else can claim you (or your spouse if filing jointly) as a dependent. Can still e file 2011 taxes Use Table 20-2 or 20-3 instead. Can still e file 2011 taxes Table 20-2. Can still e file 2011 taxes Standard Deduction Chart for People Born Before January 2, 1949, or Who are Blind Check the correct number of boxes below. Can still e file 2011 taxes Then go to the chart. Can still e file 2011 taxes You: Born before January 2, 1949 □ Blind □ Your spouse, if claiming spouse's exemption: Born before January 2, 1949 □ Blind □ Total number of boxes checked   IF  your filing status is. Can still e file 2011 taxes . Can still e file 2011 taxes . Can still e file 2011 taxes AND the number in the box above is. Can still e file 2011 taxes . Can still e file 2011 taxes . Can still e file 2011 taxes THEN your standard deduction is. Can still e file 2011 taxes . Can still e file 2011 taxes . Can still e file 2011 taxes Single 1 $7,600   2 9,100 Married filing jointly 1 $13,400 or Qualifying 2 14,600 widow(er) with 3 15,800 dependent child 4 17,000 Married filing 1 $7,300 separately 2 8,500   3 9,700   4 10,900 Head of household 1 $10,450   2 11,950 *If someone else can claim you (or your spouse if filing jointly) as a dependent, use Table 20-3 instead. Can still e file 2011 taxes Table 20-3. Can still e file 2011 taxes Standard Deduction Worksheet for Dependents Use this worksheet only if someone else can claim you (or your spouse if filing jointly) as a dependent. Can still e file 2011 taxes Check the correct number of boxes below. Can still e file 2011 taxes Then go to the worksheet. Can still e file 2011 taxes You:   Born before January 2, 1949 □ Blind □ Your spouse, if claiming spouse's exemption: Born before January 2, 1949 □ Blind □ Total number of boxes checked 1. Can still e file 2011 taxes Enter your earned income (defined below). Can still e file 2011 taxes If none, enter -0-. Can still e file 2011 taxes 1. Can still e file 2011 taxes   2. Can still e file 2011 taxes Additional amount. Can still e file 2011 taxes 2. Can still e file 2011 taxes $350 3. Can still e file 2011 taxes Add lines 1 and 2. Can still e file 2011 taxes 3. Can still e file 2011 taxes   4. Can still e file 2011 taxes Minimum standard deduction. Can still e file 2011 taxes 4. Can still e file 2011 taxes $1,000 5. Can still e file 2011 taxes Enter the larger of line 3 or line 4. Can still e file 2011 taxes 5. Can still e file 2011 taxes   6. Can still e file 2011 taxes Enter the amount shown below for your filing status. Can still e file 2011 taxes Single or Married filing separately—$6,100 Married filing jointly—$12,200 Head of household—$8,950 6. Can still e file 2011 taxes   7. Can still e file 2011 taxes Standard deduction. Can still e file 2011 taxes         a. Can still e file 2011 taxes Enter the smaller of line 5 or line 6. Can still e file 2011 taxes If born after January 1, 1949, and not blind, stop here. Can still e file 2011 taxes This is your standard deduction. Can still e file 2011 taxes Otherwise, go on to line 7b. Can still e file 2011 taxes 7a. Can still e file 2011 taxes     b. Can still e file 2011 taxes If born before January 2, 1949, or blind, multiply $1,500 ($1,200 if married) by the number in the box above. Can still e file 2011 taxes 7b. Can still e file 2011 taxes     c. Can still e file 2011 taxes Add lines 7a and 7b. Can still e file 2011 taxes This is your standard deduction for 2013. Can still e file 2011 taxes 7c. Can still e file 2011 taxes   Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. Can still e file 2011 taxes It also includes any amount received as a scholarship that you must include in your income. Can still e file 2011 taxes Prev  Up  Next   Home   More Online Publications